Atmel settles with its former general counsel to resolve options backdating litigationBy AP
Tuesday, June 8, 2010
Atmel resolves litigation over stock option grants
SAN JOSE, Calif. — Atmel Corp. said its has reached a settlement with its former general counsel that resolves all remaining claims in long-running litigation over stock-options backdating at the computer chip component maker.
Atmel had previously settled claims against “a number of present and former employees, officers and directors,” the company said late Monday. James Michael Ross, Atmel’s former general counsel, had been the sole remaining defendant.
The settlement with Ross is subject to court approval. Atmel said the settlement provides for a payment to Atmel by the company’s insurers, and for dismissal of all remaining claims. Further details of the settlement weren’t disclosed.
In July 2006, Atmel’s audit committee began investigating the company’s historical stock option granting practices. The next spring, the company said it expected to record about $125 million in stock-based compensation costs, after finding backdated options going back to 1997.
Backdating occurs when a stock option’s exercise price is set at a point lower than the prevailing market price — which can inflate the recipient’s award. While the manipulation itself isn’t necessarily illegal, securities laws require that companies properly disclose the practice in their accounting and settle any charges that may result.
The company said its audit committee found that 93 of the 112 stock option grants made between Jan. 1, 1997 and Aug. 3, 2006 included options that weren’t issued on the dates set forth in its stock option records.
Atmel said in April 2007 that the people mainly responsible for the backdating were Ross and company co-founder and former Chief Executive George Perlegos. Both had been terminated for cause in August 2006, after an unrelated investigation into the misuse of corporate travel funds.
Steven Laub, Atmel’s president and CEO, said in Monday’s statement that his company is “pleased to have successfully resolved the remaining claims and to have put this derivative litigation behind us.”
Shares of Atmel fell 2 cents to close at $4.67.
Tags: California, North America, Personnel, San Jose, United States